Rethink costs, communicate, be hopeful: Key advice to combat uncertainty during a pandemic
With over 700,000 Covid-19 cases confirmed across the globe, and that number climbing steadily, several nations have been forced to announce unprecedented lockdowns and curfews. India is currently under a 21-day lockdown. In such times, business leaders are scrambling to deal with an array of problems such as slumping sales and faltering supply chains to working remotely, ensuring productivity, the health of their employees, and dealing with losses.
To help put things in perspective, navigate the tough times, and figure out the best ways to communicate and survive this crisis, YourStory, in association with Amazon Internet Services (AWS), brought together a panel of marquee investors, startup founders and VCs to share their learnings, wisdom, and experiences with early-stage startup founders and CXOs in a virtual fireside chat in a webinar titled ‘Tech Startups in India: Navigating Through Uncertain Times.’
The webinar was hosted to help founders use the mental, cultural and tactical frameworks shared by the speakers to help build a strategy to course through the next few months.
Navdeep Manaktala, Director & Head - Digital Native (Startup) Business at Amazon Internet Services, pointed out the crucial need for such a discussion given that these are unprecedented times for everybody. “It’s a time of great stress, be it in terms of business continuity, culture, wellbeing or impact on business. There is no instruction manual on how to deal with these times, and we look forward to drawing from the experience of these battle-hardened entrepreneurs and investors to help form our own strategies to deal with this situation.”
Navigating the impact on business
The first panel - How to Navigate the Impact on Business - saw Ashish Kashyap, Founder, INDWealth; Pankaj Bansal, Founder and CEO, PeopleStrong and Pete Yamasaki, VP- APAC, Druva Data Solutions, in conversation Alok Goyal, Partner at Stellaris Venture Capital.
Alok opened the discussion by drawing parallels between the 2008 financial crisis and the economic downturn in the light of COVID 19. Recalling how robust players started receding after the 2008 crisis, moved out from prime real estate to try and survive, Pankaj said the most important lesson from the time was to ensure there was enough cash in the bank. Because we had turned into a leaner company, we decided it was the right time to build our product.”
Talking about how businesses are re-evaluating their operating plans, Pankaj added the best piece of advice to early-stage startups is to take a graded approach.
“Make a plan for 18 months and then build on it, make sure you spend time working on your product, which otherwise takes a back seat.”
Echoing Pankaj’s sentiments, Ashish said that right now, the focus needs to be on survival.
“This is the best time to recall Darwin and his theory of the Survival of the Fittest. Now is the time to watch and count every penny you spend, be prepared and upskill” he said.
For those wanting to spot the silver lining, Pete suggested that crises like these can turn into opportunities to change business processes and focus on developing products.
From following the OODA loop – observe, orient, decide, act — to adjusting business plans, minimising churn and making cash last, the panelists also answered questions from the audience. Their advice – stategise new ways to stay productive, be in constant communication with your buyers, make a business plan with the assumption that there will be no funding for the next 18 months. Most importantly, they said it was time to rethink spending and overall expenditure.
Culture, communication and well-being
While the first panel discussed the impact of the crisis on business and ways to overcome it, the second focused on strategies to keep teams motivated and connected; model behaviour for leaders; making the right investments in tech and product; communicating with internal and external stakeholders and more.
“One of the biggest questions is how to effectively manage and lead organisations during these times and now is a good time to share ideas on long- and short-term effects and solutions,” said Shripati Acharya, Co-founder and Managing-Partner, Prime Venture Partners, the moderator for this panel. When asked about the transition of working from home, Anand Jain, co-founder, CleverTap said not much has changed.
“We are a company of 300 employees of which 100+ are based outside India - Dubai, Bogota, London, etc. So, working remotely is not new for us. Having said that, the enterprise sales space has taken a slight hit since it requires meeting people. However, there too we have begun speaking to prospects on virtual channels.”
And while working from home is the new reality, Srikanth Velamakani, Co-founder, Fractal Analytics, said that it has prompted a stronger need to stay connected and communicate. To achieve this, Srikanth has been hosting four town halls a week with his employees - virtually, of course.
“It’s all about human connections. The crisis has taught us that we need to be more human-centric too. It’s imperative that we shouldn’t be pushy at the moment - be it with clients or employees, and instead work together.”
Every leader has to figure out how to navigate this situation, Anand added. As a leader who walks the talk, he has been trying to maintain cheer in the team by hosting Zoom calls in small batches. “It’s just a catch-up call, checking in about safety, etc. Nothing about numbers and sales.”
While keeping communication with both employees and clients positive, transparent and regular, the panelists urged founders to look at the opportunity that opened up -- the entire world is accessible remotely.
Even as the panel discussed opportunities and hope in the time of this crisis, Shripati steered the conversation to businesses who cannot possibly tap into opportunities. While few startups like CleverTap are fortunate to raise enough capital to tide through this difficult time for the next two years at least, what about startups that do not have enough capital to fall back on? “Entrepreneurship is a story of resilience,” answered Srikanth. “When the dust settles, the world is going to change and new avenues for digital marketing, healthcare, supply chain, etc will open up. Find the bright spots in these dark times and work towards the future.” Anand took a metaphorical approach with a disclaimer that the goal of business is to stay in business. “This is the time to be a cockroach, not a unicorn,” he said.
Ensuring business continuity
A healthy discussion on communication, leadership and empathy for leaders was followed by an invigorating session between Rajan Anandan, Managing Director, Sequoia Capital; Sanjay Nath, managing partner, Blume Ventures; and Yashish Dahiya, CEO, PolicyBazaar on ‘Ensuring survival and business continuity’. YourStory founder Shardha Sharma moderated this panel. With discussions on managing money and cash flow, pivoting businesses to suit the current times and extending cash runways, the panel opened up conversation around planning, making hard choices and making the most of a bad situation.
The most important thing to remember, Rajan said, is keeping in mind that the plan you had two weeks ago is no longer valid. “The first operating principle is to make a new plan and your goal should be to double or triple your cash runway since this crisis is not short-lived.” Being realistic about revenue is another tip.
“You should be renegotiating every lease, new contract, re-think all costs.”
Sanjay Nath of Blume Ventures agreed with Rajan, adding that as CEOs, the only thing you can really control in this situation is cost.
“Examine every expense, keep your best customers close to you, as opening new businesses is going to be difficult; go slow on new investments; and while you focus on stabilising, look for new opportunities that this downturn will present, ”Sanjay said.
The future of funding is a looming question for early-stage startups. The panel threw light on how funding will change and startups will have to answer tough questions on building a viable economic model as the bar is going to be set higher. “Funding will continue, but a lot of hard questions will be asked on building a viable economic model. If you are just starting up, leveraging friends and family will be important as companies are going to be built frugally,” he added.
While all three panels discussed finding opportunity in adversity, PolicyBazaar’s Yashish Dahiya managed to make it a reality. His 13,000-strong team of call centre employees are all working from home.
“The systems have been deployed seamlessly and unlike what many would think, running a sales call centre remotely is working very well. In fact, since working from home, our sales have gone up by 20 percent”!
Even after the crisis is over, the successful deployment of systems to work from home means the company will no longer need at least 50 percent of the office space it rented for call centres. “We have already given out notices to some buildings. This is a huge cost saving opportunity,” Yashish said.
However, this does not take away from the grim reality that there will be tough decisions to make, employees to let go off and scale down. In times of uncertainty, all you can do is hope for the best and as Rajan puts it, ‘make a new plan and triple your runway’.